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Can anyone please assist with my situation?
My sister would like to transfer a property as a gift to my brother and I, the property does not have a mortgage and was not purchased with one. The house has always been used as a rental property with a Private Rented Property License issued by a local London council. It’s currently undergoing an extensive renovation project and hence is empty until the works is complete, once again ready for the rental market.
My brother does not have a property in his name but I am a house owner. I have been informed that we need to complete forms AP1, TR1 and ID1. Would there be any Tax implications since the transfer is via a gift with no monetary value?
I am still journeying my way as an accounting student but I may be able to share some info related tn your question.
When transferring the equity/gifting the asset to your sibling, you will need to identify the property transfer value e.g lets say its £450,000
The law allows you to gift any amount whilst you are alive. However the donor must survive 7 years after gifting to escape tax charges. If they die within this period, they will be charged inheritance tax on the difference between £325,000 (aka nil rate band) and the transfer value. I am not going into the complexity of the formula, but feel free to ask if interested.
EDIT: Given the property in question is a Buy to Let - on transfer the donor i.e. your sister will be liable for paying capital gains tax at 10% or 20% depending on their level of taxable income.
Would there be any Stamp Duty Land Tax to pay since I already own my resident property, I know my brother will not need to pay anything?
No stamp duty but likely capital gains tax
Director of Tax Peplows Limited
CTA ACA FCCA
My friend has just gifted a flat to his son and yes had to pay stamp duty.. If you already own a property you will also have to pay the additional 3%. Even if the other person doesn't own a property, as you both own it stamp duty will have to be paid on the whole amount. Only way round it is for it to be in his sole name.
If there is no consideration there is no stamp duty so as long as pure gift of an unmortgaged property stamp duty is nil
What is meant by "no consideration"?
There has never been a mortgage on the property, it was purchased with savings.
In effect if you give anything for the property or take on any debt
Why would there be capital gains tax since it's been given away as a gift?